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AUD/USD added to the overnight heavy losses and slipped below the 0.7600 mark on Wednesday. A bearish head and shoulders breakdown supports prospects for an extension of the ongoing decline, FXStreet’s Haresh Menghani reports.

Key quotes

“Market participants now look forward to the US economic docket, highlighting the release of Durable Goods Orders and flash PMI prints (Manufacturing and Services) later during the early North American session. Apart from this, Fed Chair Jerome Powell’s second day of testimony before the Senate Banking Committee will influence the USD and produce some trading opportunities around the major.”

“YTD lows around the 0.7565-60 region might act as immediate support. Some follow-through selling will turn the aussie vulnerable to accelerate the downward trajectory towards challenging the key 0.7500 psychological mark. The pair could eventually drop to the next major support near the 0.7460 area.”

“Any attempted recovery back above the 0.7600 level will now be seen as an opportunity to initiate fresh bearish positions. This, in turn, should cap the upside for the major near the mentioned neckline support breakpoint, now turned resistance near the 0.7655-60 region. This is followed by a strong barrier near the 0.7700 mark, which if cleared decisively will negate the bearish outlook and prompt some aggressive short-covering move.”